The Development Comes Over A Month After The Ecommerce Firm Created An Internal AI Unit Called AIforIndia

With rival Amazon doubling down in its efforts to capture the Indian market, homegrown ecommerce unicorn Flipkart has now set its eyes on Silicon Valley. As per reports, the company is looking to invest $25 Mn in at least one artificial intelligence (AI) startup based in Silicon Valley.

The move, according to sources, is aimed at procuring deep tech solutions that will enable Flipkart to thwart competition from its biggest competitor, Amazon India.

A person close to the development said, “They (Flipkart) are looking at tech acquisitions in the valley because differentiated tech is a new focus area for the company. The idea is to bring these Indian tech founders from the US who can bring deep technology capabilities that don’t exist in India.”

As per other sources, Flipkart has been trying to catch up to its arch nemesis Amazon India, in terms of technology and innovation. Despite its efforts, the homebred giant has been lagging behind Amazon by at least four to five years.

In addition to fueling massive investments towards R&D and innovation, the Jeff Bezos-founded company has been aggressively hiring new talents for its technology division. Globally, Amazon has also invested exhaustively in artificial intelligence to improve its marketplace.

The source cited above stated, “Even as of 2015, Flipkart’s catalogue management system was broken. The search is still broken.”

Flipkart Placing Its Bets On Artificial Intelligence

As shared by the then Chief Product Officer of Flipkart Punit Soni in an earlier interaction with Inc42, the company is striving to become more mobile-centric through the adoption of newer technologies such as artificial intelligence and social networks. He also added that heavy discount on an online purchase may not earn consumer loyalty and help build a user base in the long run.

In 2015, Flipkart had acquired the F7 Labs in the Silicon Valley to focus on AI and machine learning. As per an ET report, the 10-person Labs team is working on creating a model to determine which products get returned the most, so as to build a more cost-effective way to manage those returns, and has automated the moderation of the comments and product reviews that appear on the site.

The company is currently running Project Mira, an artificial intelligence-focused effort, in stealth mode since last year.

“On 28 February (2017), we launched the first version of our conversational search experience. Now, our users with broad intent (searching for, say, shoes or bedsheets) are guided by relevant questions, conversational filters, shopping ideas, offers and trending collections,” said Ram Papatla, Vice President of Product at Flipkart, in April 2017.

On similar lines, it partnered with Microsoft to reportedly deploy AI (artificial intelligence) and ML (machine learning)-based solutions that would be running future sales for the ecommerce unicorn.

At the time, Flipkart co-founder and Chairman Sachin Bansal stated that the ecommerce player would be investing “hundreds of millions of dollars” in the AI initiative over the next few years. According to Bansal, Flipkart is looking at AI-related acquisitions in India and in the US.

He also revealed that Flipkart has begun recruiting AI experts, building infrastructure, striking hardware partnerships and working with top educational institutions, including IITs in this direction. The new AI team is being headed by Chief Data Scientist Mayur Datar with Bansal and Flipkart CEO Kalyan Krishnamurthy directly working on some key projects.

Sachin said at the time, “This is the next big thing for us, where we are betting big on the use of AI and machine learning to solve problems at Flipkart. India’s problems are unique and we need to apply AI in the ecosystem to solve Indian problems. We believe that some of the focus areas for AI in developed countries cannot be applied for India. At Flipkart, we will solve problems differently because the underlying problems (in India) are different.”

Flipkart’s decision to invest $25 Mn in a Silicon Valley-based AI startup has come at a time when more and more tech companies embracing the power of AI and machine learning to optimise their products and services.

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